Saturday, February 20, 2010

UK PRESS
An Old Bailey judge has called for new regulation on traditional Chinese medicines as a "doctor" who sold cancer-causing pills walked free from court. Ying "Susan" Wu sold the tiny brown "Xie Gan Wan" tablets to Patricia Booth for more than five years from a shop in Chelmsford, Essex. Mrs Booth, 58, began taking the pills three times a day to treat a skin condition but they ended up destroying her kidneys and giving her cancer.

But Judge Jeremy Roberts ruled that, as the sale of traditional Chinese medicines was totally unregulated, there was no evidence that Wu knew of the potential harm.

The judge threw out a charge of "administering a noxious substance" against the 48-year-old, of Holland-on-Sea, Essex, and she pleaded guilty to five lesser counts and was given a two-year conditional discharge.

Giving his ruling he said: "It is an unfortunate fact that there is no system in this country to regulate Chinese herbal medicine retailers like Ms Wu by requiring them to be registered with an appropriate professional body or trade association.

"Somebody like Ms Wu is entitled to set up shop as a herbal medicine retailer and to operate entirely unsupervised.There may be a gap in our law here which the Government might wish to address."

The court heard that Mrs Booth took the medicine, which she bought from the Chinese Herbal Medical Centre in Chelmsford, from February 1997 to November 2002. She said she believed it was a "safe and natural alternative" to the antibiotics she had previously been taking for her skin condition - and which she feared could damage her long-term health.A months after she stopped taking the Chinese pills, she was taken seriously ill and had to undergo an urgent blood transfusion.

An analysis of the pills showed they contained a banned substance, aristolochic acid. Her health deteriorated to such an extent that her kidneys were "destroyed" and she had to have them removed, she contracted urinary tract cancer, and she later suffered a heart attack.

The Register of Chinese Herbal Medicine, which represents more than 450 practitioners, said the case highlighted "the urgent need for the statutory regulation of herbal medicine in the UK".

The Telegraph-UK
Millions of savers are losing money by putting their cash into a savings account due to poor investment returns and the increasing cost of living, it has been disclosed. Savers are suffering despite Barclays, Britain third-largest bank, reporting profits of £11.6 billion for 2009.

Rising inflation is eroding the spending power of savers’ cash and, combined with historically low interest rates, is leaving them with less money than when they started. Savers have already been badly hit by shrinking rates of return following Bank of England interest rates dropping to 0.5 per cent.

But the jump in inflation to 3.5 per cent, released in official figures yesterday, came as a fresh blow to hard-pressed pensioners and those trying to live off their savings. Politicians and financial experts said it will leave millions of savers "devastated".

With the consumer prices index rising to 3.5 per cent, basic rate taxpayers now need to earn a rate of 4.38 per cent on their savings before they begin to see a real return, while higher rate tax payers need to earn 5.83 per cent.

But with typical rates on a no notice savings account dropping to 0.02 per cent to 0.73 per cent in the past month, it means basic rate taxpayers are losing the equivalent of 2.92 per cent a year, with higher rate tax payers losing 3.06 per cent, according to the figures from personal finance statisticians Moneyfacts.

Just two accounts out of a total of 1,101 savings accounts produce a real rate of return for higher tax payers once tax and inflation are taken into account. However, these accounts are only for regular savers and not for those with a lump sum to invest, according to the data produced exclusively for The Daily Telegraph. And total of only 52 accounts produce a real return for basic rate taxpayers.
S
avers are suffering despite Barclays, Britain’s third-largest bank, reporting profits of £11.6 billion for 2009 and speculation that the excessive bonus culture is returning to the City. Vince Cable of the Liberal Democrats, said: “Negative real interest rates are a killer for savers.

“It will not make it possible for Britain to switch from being a nation that is excessively in debt to a society based on prudent saving.” Darren Cook, a spokesman for Moneyfacts said: “Each month, inflation is cutting deeper into people’s spending power and lower savings interest rates are creating an even bitterer pill to swallow.

“Those who are relying on their savings pot to subsidise other income are seeing their savings being eroded. “Savers are hoping that this is just a short spike in inflation, but will lead to further aggravating issues if inflation does not fall as quickly as it is going up.”

David Black, a banking expert at personal finance researchers Defaqto, said: “Those reliant on savings interest to supplement inadequate income will be devastated by this double whammy of rising inflation and low interest rates.” The Consumer Prices Index, the Government’s preferred measure of inflation, jumped to a 14-month high of 3.5 per cent last month, the Office for National Statistics disclosed.

The rise was blamed on the return of Value Added Tax to 17.5 per cent. The Government had previously reduced VAT to 15 per cent on a temporary basis until last month to try to boost consumer spending and ease the recession. The Retail Prices Index – which includes the cost of mortgages and housing - also rose sharply in January to 3.7 per cent.

Economists said the rise in inflation increases the prospect that the Bank of England will maintain the Bank Rate its current level. Howard Archer, an economist at Global Insight said: “When interest rates finally do start to rise the increases are likely to be gradual.”

Individual Savings Accounts offer an additional small glimmer of hope for basic rate taxpayers, but there is nothing available to higher rate taxpayers. National Savings & Investments offer three and five year Index Linked Certificates that are tax free and pay 1 per cent above RPI inflation.

Wednesday, February 17, 2010

By Warwick Ashford
Monday 15 February 2010
The government is to invest £4.3m to fight criminals who use e-mails and websites to con UK consumers out of £3.5bn a year. Some 73% of adults in the UK received a scam e-mail and three million consumers were victims of online scams in the past year, according to the Office of Fair Trading (OFT).

The money will be invested over three years in an OFT specialist cyber enforcement team to fight online crime and restore consumer confidence in online shopping. Some of the money will also be used to provide funding for Trading Standards.

The government's Digital Britain Report published in June 2009 highlighted the need to ensure consumers are protected and confident when shopping online."Our investment will help the OFT and Trading Standards to put in place new specialist teams, training and technology to take the fight to these criminals," said consumer minister Kevin Brennan. The OFT team has begun training with an international expert, working in a new laboratory with specialist equipment to support the OFT's enforcement work.

The government initiative will also see new highly trained Trading Standards enforcers with specialist equipment in England, Scotland and Wales. Enforcers will focus on fake products and traders, counterfeit ticket sales and scam websites aimed at duping consumers into paying for

"The enforcement team will be looking at the activities of a wide range of commercial websites and taking action in cases where consumer rights are abused," said Heather Clayton, senior director for the OFT. The OFT will coordinate which enforcer is best placed to take action on a particular issue and will focus on the most serious cyber scams.

Where appropriate, cases will be passed on to the Police Central eCrime Unit and the Serious and Organised Crime Agency, as well as the Companies Investigations Branch of the Department for Business, Innovation & Skills (BIS).

Monday, February 1, 2010

From the Business Times issue of Friday, 27 November 2009 11:51
By MNAKU MBANI & ERIC TOROKA

ALTHOUGH Tanzania has taken major efforts to reform the banking and financial institutions sector over the last two decades, the issue of consumer protection has remained virtually untouched by the 'reforms.'

This situation has led to increasing abuse of good business practices by many of the financial institutions and banks, as well as a singular lack of fairness and transparency in dealing with customers.

"The providers of financial services in Tanzania need to understand that, as long as they continue to gain unfairly from their customers.... they are nonetheless sowing the seeds of their own destruction...," said Daimon Mwakyembe, chairman of the Tanzania Consumer Advocacy Society (TCAS).

Presenting a paper recently on 'The Quality of Financial Services: a Critique From Consumers' Perspective,' Mwakyembe cited as an example of bad practice the banks and financial institutions which “have continued to overcharge consumers in terms of fees, interest rates and commissions – while others reject low income consumers out of hand as 'unbankable.'”

The occasion was a forum organized by the Government Controller & Auditor-General (CAG) in the nation's commercial capital, Dar es Salaam.

TCAS is a private, voluntary nongovernmental, non-partisan and nonprofit making organization that was registered as a company limited by guarantee in July 2007 under the Companies Act of 2002 (Chapter 212 of the Laws of Tanzania).

The Society’s mission is to provide an advocacy platform that would make consumers' voices heard, raise consumers' awareness of their rights, build consumers' ability to claim their rights, as well as make markets accountable and more responsive to consumers' needs and interests.

Observers say most of the banks and financial institutions operating in Tanzania siphon billions of shillings off their customers as a matter of course. This is partly because
of the latter's ignorance of their rights and dues, and partly because the reforms and extant legislation are silent on the matter.

Mwakyembe – who is a former director-general of the Tanzania Bureau of Standards (TBS) – said despite the reforms, fairness and transparency in the treatment of customers is not always ensured... And lack of capability on the part of customers is still being exploited negatively.

As a result, there is no mechanisms on how to curb abusive business practices by financial institutions at the national and international levels, and which adversely affect consumers.

Mwakyembe suggested that the (central) Bank of Tanzania and other relevant authorities need to urgently review the extant financial regulatory policies and legislation. The main objective this time should be to ensure that they – among things – reflect a wide view of consumer protection on ensuring proper business conduct.

It is noted that the Bank of Tanzania, which has the mandate to supervise the banking and financial industry as a whole, has no straightforward consumer protection guidelines.

He said this situation will not favour the survival of financial institutions in the long run.

"Good quality service is a product of right consumer protection and is, thus, the new paradigm that is defining – and, indeed, influencing – the entire economic sector and economic relations," he said.

The International Monetary Fund's review of regulatory systems in 2004 did (among other things) advise on “stipulation and clear identification of common regulatory themes for consumer rights promotion and protection,” Mwakyembe noted.

"Despite efforts in addressing the competitiveness of the financial sector, consumer abuse and rights violation are on the rise, and are directly affecting the economic welfare of many consumers," he stressed.

Noting that gthe main part of poor services in Tanzania's financial market is contributed to mainly by lack of consumers' awareness on their rights when making choices,h Mwakyembe stressed that "inadequate consumer awareness on their rights and obligations is the main stumbling block for realization of good services...

"Yet, if there is one area that the financial sector could use to address its economic malaise and ensure its sustainable future, it is through the provision of financial education to consumers.h

This would be in line with the implementation of the United Nations Consumer Protection Guidelines of 1999 which encourage Governments and institutions to work out clear, fair, guidelines that protect the interest of consumers.h

A research conducted in 2007 by the Finscope Group showed that, gin order to strengthen financial institutions in any country (including Tanzania), there is a need to promote financial capability to consumers.h

This includes gempowering people to be capable of managing their financial assets and liabilities, to understand their rights and responsibilities vis-a-vis financial institutions.h

Mwakyembe: "in my view, financial education to consumers should focus on building financial discipline, managing their incomes, boosting their saving behaviour and the promotion of risk mitigation," he concluded.

In another development, auditor-general of Sweden, Eva Lindstrom, commended the National Audit Office of Tanzania for taking the initiative to organise the forum which, she said, was پgrelevant and timely.پh

In these times of financial crisis, Lindstrom said, “Supreme Audit Institutions in many countries are challenged to properly address the audit of financial supervisory agencies that are aiming at consumer protection and mitigating the risks that large sums of taxpayers' money will have to be used for the rescue of the financial system.”

Noting that gthe events of the past year have highlighted the significance of financial supervision,h she said that financial markets and their institutions must operate in a highly competitive environment – and there will always be efforts made to circumvent the regulations.

gA strong, independently-organized financial supervisory authority is, therefore, of the highest importance for the stability of the economy and taxpayers.”

The global financial crisis also pointed to the importance of supervision of not only separate financial institutions, but also of the entire financial system.

Moreover, the Swede said, new regulations on financial markets will need to be introduced in the years to come, globally.

Supervision of cross-border banks will have to be improved – which will most certainly mean more cooperation between financial supervisory agencies in different countries.

Lindstrom observed that central banks failed to foresee the effects of the deterioration of markets that led to liquidity problems. To that effect, monetary policies need to take into account financial stability... And it is within the mandate of central bank to monitor and handle monetary conditions.

“The Supreme Audit Institutions have an important role to play in monitoring the operations of the financial supervisory agencies. Those agencies make up a vital part of the financial infrastructure, and when that infrastructure fails, the costs of that failure are most often transferred to the taxpayers,” she elaborated.

gThus we, as auditors, must make sure that we have the knowledge and competence required to audit these agencies.h

According to her, gauditing will create confidence in the system, an asset which is vital in promoting effective financial markets and stable economic growth.h

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About Tanzania Consumer Advocacy Society

Tanzania Consumer Advocacy Society (TCAS) is a private, voluntary, non governmental, non partisan and non profit making organization that was registered in July 2007 under the Companies Act of 2002, Chapter 212 of the law of Tanzania as a company limited by guarantee.
Our Vision;-
TCAS’s Vision is a Tanzania where consumers are aware of their rights and have ability to claim their rights. Where markets are accountable and more responsive to consumer’s needs and interests.
Our Mission;-
To provide advocacy platform that would make consumers voices heard, raise consumer’s awareness of their rights, build consumer’s ability to claim their rights and make markets accountable and more responsive to consumer’s needs and interests.